- The International Monetary Fund (IMF) has approved a Staff-Monitored Program (SMP) with Haiti, effective from December 20, 2024, through December 19, 2025.
- This new one-year SMP is designed to strengthen macroeconomic stability, enhance economic resilience, and improve governance, aligning with the government’s macroeconomic priorities.
- The authorities’ commitment to publish the forthcoming Governance Diagnostic Report has been positively acknowledged by the IMF management.
WASHINGTON / HAITI – On December 20, 2024, the International Monetary Fund (IMF) approved a new Staff-Monitored Program (SMP) with Haiti, set to last until December 19, 2025. This SMP, developed collaboratively with Haitian authorities, addresses the nation’s unique challenges while promoting its economic objectives.
SMPs serve as collaborative frameworks to monitor the implementation of economic strategies, providing a pathway towards potential financial aid from the IMF in the future.
Haiti is currently navigating a multidimensional crisis marked by a complex political transition and a challenging economic landscape. Recent global and domestic shocks have exacerbated the country’s instability, leading to severe humanitarian consequences, including escalating gang violence that disrupts essential services. This turmoil has intensified inflation, leaving approximately half the population facing acute food insecurity. A resolution to the security situation is critical to fostering economic growth.
The urgent focus is on restoring security, a foundational element for macroeconomic stability and sustainable growth. Despite ongoing challenges, Haitian authorities remain dedicated to progressing with the SMP and have implemented measures to mitigate the adverse effects of these crises, achieving better-than-expected macroeconomic conditions.
As of September 2024, net international reserves were nearly US$1 billion. Despite political challenges, Haiti’s key economic institutions have maintained engagement with the IMF, consistently implementing strategies to manage macroeconomic pressures and sustain economic activity. They have also provided timely data on program benchmarks, demonstrating accountability and commitment.
The SMP signals the authorities’ dedication to advancing macroeconomic stabilization and governance reforms while preserving the gains achieved in recent years amid various challenges. The inclusive consultative process has underscored the government’s full ownership and support for the SMP.
The Haitian government has a critical opportunity to implement reforms that enhance resilience and unlock long-term growth potential. Key to this strategy is the revitalization of revenue generation to meet significant development needs and ensure effective allocation of resources. The new SMP measures aim to facilitate these objectives.
Strengthening the social safety net remains essential for alleviating the impacts of ongoing shocks and addressing poverty. The oversight of spending commitments related to Food Shock Window resources must align with SMP commitments.
The commitment of fiscal and monetary authorities to maintain zero monetary financing of the deficit is commendable and should be sustained. The upcoming FY2023 financial audit of the Central Bank of Haiti is crucial for ensuring transparency, with its findings expected by June 2025.
Advancing governance reforms is critical for Haiti’s progress towards stability, inclusive growth, and building trust with the private sector and international partners. The plan to publish the Governance Diagnostic Report will lay out a framework for necessary reforms and will need support from both the IMF and stakeholders.
A government-led initiative to bolster the economy’s resilience against various shocks requires extensive support from the international community. This financial assistance is vital for maintaining quality public spending in the short and long term. The government is encouraged to seek grants while avoiding non-concessional loans that could jeopardize debt sustainability and contradict SMP commitments.
Following the Fund’s Strategy for Fragile and Conflict-Affected States, IMF staff will continue to work closely with Haiti’s primary development partners to foster governance enhancements and strengthen local capacities.
